Financial Engineering Instruments and their Assessment Under EU State Aid Rules. Bruges European Economic Policy (BEEP) Briefing 26/2013

Financial engineering instruments such as guarantees, loans and equity are increasingly used in public funding of enterprises. These instruments have three attractive features: they are repayable, they “leverage” private involvement, and they have a multiplier effect because they generate new income. At the same time, however, they are technically complex and they are subject to state aid rules. Their assessment under EU state aid rules creates two additional problems. First, under certain conditions financial instruments may not contain state aid. This is when public authorities act as “private investors”. This means that state aid cannot be presumed to exist in all financial instruments. It must first be established through market analysis. Second, when state aid is found to be present it is not always possible to quantify it. For this reason the state aid rules that apply to financial instruments differ significantly from other rules. This paper reviews how financial instruments have been assessed by the European Commission and under which conditions the state aid they may contain can be considered to be compatible with the internal market. The paper finds that by and large Member States have succeeded to design measures that have all been approved by the Commission.

The Impact of Visa Liberalisation in Eastern Partnership Countries, Russia and Turkey on Trans-Border Mobility. CEPS Liberty and Security in Europe No. 63, March 2014

Schengen Visa liberalisation in the Eastern Partnership countries, Russia and Turkey has proven to have a huge transformative potential across the justice, liberty and security policies of the countries where it has been deployed. Far-reaching technical reforms in the fields of document security, irregular migration and border management, public order security and fundamental rights have to be implemented so that visa-free travel can be allowed. Evidence provided by visa applications data reveals that visa liberalisation is a logical step, provided that the technical reforms are adopted and implemented. This study analyses the current state of play of the implementation of the EU visa policy instruments and assesses the positive impact of visa-free travel on trans-border mobility according to current visa application statistics.

Informational Barriers to Energy Efficiency - Theory and European Policies. Bruges European Economic Research (BEER) Papers 15/2009

This BEER addresses informational barriers to energy efficiency. It is a widely acknowledged result that an energy efficiency gap exists implying that the level of energy efficiency is at an inefficiently low level. Several barriers to energy efficiency create this gap and the presence of asymmetric information is likely to be one such barrier. In this article a theoretical framework is presented addressing the issues of moral hazard and adverse selection related to energy efficiency. Based on the theoretical framework, European policies on energy efficiency are evaluated. The article is divided into two main parts. The first part presents the theory on information asymmetries and its consequences on energy efficiency focusing on the problems of moral hazard and adverse selection. Having established a theoretical framework to understand the agency barriers to energy efficiency, the second part evaluates the policies of the European Union on energy efficiency. The BEER finds that problems of moral hazard and adverse selection indeed can help explain the seemingly low levels of energy. In both presented models the cost to the principal from implementing high energy efficiency outcome is increased with the informational asymmetries. The theory reveals two implications to policies on energy efficiency. First, the development of measures to enable contractual parties to base remuneration on energy performance must be enhanced, and second, the information on technologies and the education of consumers and installers on energy efficiency must be increased. This could be complemented with certification of installers and energy efficiency advisors to enable consumers to select good agents. Finally, it is found that the preferred EU policy instrument on energy efficiency, so far, seems to be the use of minimum requirements. Less used in EU legislation is the use of measuring and verification as well as the use of certifications. Therefore, it is concluded that the EU should consider an increased use of these instruments, and in particular focus on a further development of standards on measurability and verification as well as an increased focus on education of consumers as well as installers and advisors on energy efficiency.

Energy Efficiency: Trends and Perspectives in the Southern Mediterranean. MEDPRO Technical Report No. 21/December 2012

This paper has two objectives. First, it attempts to establish the potential of policies on energy efficiency and energy demand-side management in the southern Mediterranean region. Second, by examining past trends in energy intensity and trends up to 2030, it analyses the prospects and costs of such policies, compared with expected developments in the price of energy resources. Based on both analyses (MEDPRO WP4) and on prospects for growth (MEDPRO WP8), it seems that energy intensity in the Mediterranean should fall perceptibly by approximately 13% in the next 20 years. But given the programmed energy mix, this will not limit emissions of CO2, which are likely to increase by more than 90%. The paper first presents the rationale for demand-side management (DSM) policies. After a general discussion of concepts, it tackles the question of instruments and measures for implementing such policies, before posing the question of the cost-efficiency approach for monitoring the measures the authorities introduce. Secondly, the paper assesses energy consumption and energy efficiency in the countries of the southern Mediterranean and the ways in which their main economic sectors have changed in recent decades. The third section outlines the demand management measures introduced and, taking Tunisia and Egypt as examples, estimates the cost of such policies. The fourth and last section offers a forecast analysis of energy consumption in the Mediterranean up to 2030, highlighting probable trends in terms of final consumption, energy intensity, energy mix and emissions of CO2. The section concludes with estimates in terms of cost, comparing objectives for lower intensity, results in terms of resource savings and the types of costs this approach represents.

Linking Policy and Practice:The Case of EU-UNICEF Cooperation on the Rights of the Child in Third Countries. IES WORKING PAPER 4/2013

This Working Paper offers detailed analysis of EU-UNICEF cooperation on the rights of the child in the European Union's external relations, in particular as regards linkages between the EU policy priorities and concrete actions to advance the protection and promotion of child rights in third countries. It addresses a number of crucial questions: how has the EU’s external policy on the rights of the child developed over the past decade, what were these developments influenced by and what role did UNICEF play in these processes; what is the legal and policy framework for EU-UNICEF cooperation in foreign policy and what added-value it brings; what mechanisms are used by the EU and UNICEF to improve child rights protection in third countries and what are the motivations behind their field cooperation. The study starts by examining the development of the EU’s foreign policy on the rights of the child and covers the legal basis enshrined in EU treaties, the policy framework, and the implementation instruments and then investigates the evolution of the EU’s relations with the United Nations. The paper focuses on the EU’s cooperation with UNICEF by looking into the legal and political framework for EU-UNICEF relations, the policy-oriented cooperation and joint implementation of projects on the ground in third countries. This section outlines the rationale behind the practical cooperation as well as the factors for success and obstacles hindering the delivery of sustainable results. Finally, the Working Paper concludes with suggestions on how EU-UNICEF cooperation could be further enhanced following recent developments, namely the 2012 EU Strategic Framework and the Action Plan on Human Rights as well as human rights country strategies.